Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/121123 
Year of Publication: 
2013
Series/Report no.: 
FIW Working Paper No. 120
Publisher: 
FIW - Research Centre International Economics, Vienna
Abstract: 
We address the question of whether foreign aid helps attract foreign direct investment (FDI). This could be achieved if well targeted aid removed critical impediments to higher FDI inflows. In particular, we test the hypothesis that aid for education is an effective means to increase FDI flows to host countries in Latin America where schooling and education appears to be inadequate from the viewpoint of foreign investors. We employ panel data techniques covering 21 Latin American countries over the period from 1984 to 2008. We find that aid for education has a statistically significant positive effect on FDI. This effect is robust to potential outliers, sample selection, alternative specifications and different estimation methods.
Subjects: 
foreign aid
foreign direct investment
aid effectiveness
human capital
JEL: 
E24
F21
F35
O15
O19
Document Type: 
Working Paper

Files in This Item:
File
Size
522.19 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.